?The potential of the Chattanooga shale and higher oil and natural gas prices, coupled with new drilling technology, could push Tennessee into the ranks of key energy-producing states, according to the head of the Tennessee Oil & Gas Association.


However, outdated state regulations could slow this development or even stop it, says TOGA president Scott Gilbert.


“We are currently producing crude oil and natural gas in 11 Tennessee counties, and there is potential for oil and gas production from more than half of the state’s counties,” Gilbert says.


“Horizontal drilling in the Chattanooga shale is a major factor in the growth of oil and gas development through a good portion of the state. And high crude oil and natural gas prices are another contributing factor.”


All of this could come to a very early end, though, he says, unless the state’s energy industry can “convince the state’s oil and gas board to make the kind of changes needed in oil and gas regulations to stimulate oil and gas development rather than hold it back.”


Many of the state’s oil and gas regulations are more than 30 years old, when oil was less than $10 a barrel and natural gas was flared.


“Thirty years ago, if a well didn’t flow oil when it was drilled, it was considered a dry hole. Fifty years ago, all too often, dry holes were not plugged and were just open. Thus, the regulation requires either producing or plugging all wells.


“With today’s technology, we can turn many old wells that appear to be dry into a substantial oil or gas producer. But if the state forces old wells to be plugged, they can seldom, if ever, be reopened,” Gilbert says.

Comments